This is Part 2 in the “Rent vs Buy” series. You can find Part 1 here.
When reading one of these “rent vs buy” articles, there is usually an offhand remark about how there are “intangible benefits” when you own a home.
I realize that by “intangible”, these finance writers are referring to “non-economic” reasons to buy a house. It seems like no one cares about those reasons. After all, it’s all about the money you make investing in real estate! Buy low, sell high!
Except… buying a house is a lot more than just a financial investment—it is arguable whether it even is that, but let’s set that aside.
When you buy a house, you are buying a dream. Your dream. You are fulfilling a life goal.
These “intangible benefits” are so much more important than any investment opportunity that owning affords.
Financial considerations are important in that you have to be sure that you are able to afford to own a house and not be utterly swamped in mortgage debt. One has to be financially responsible here.
But really, what needs to be recognized is that if you want a house… if it is your dream to own your slice of property… if it is your life goal to own real estate… you find out the price, then you pay it.
This is how I live my life, based on this terribly complex equation:
Want something ⇒ Find the price ⇒ Pay the damn price
This was my operating equation when I pulled the trigger on signing for my house, which I did with my wife at midnight on the night before I got married (that’s another crazy story for another time…)
My reasons for purchasing my house were clear then and they are clear now.
I bought my house on my own terms, which may be different than yours.
Of course I do not expect everyone to share my reasons for home ownership; however, I know that many of my reasons ring true for a lot of people, and so I am writing about them here.
I strongly suspect that my reasons for owning my house is fairly universal, and underpin the global obsession with owning real estate.
The following are all of the REAL reasons that I believe a father should consider home ownership.
To obey your innate, territorial nature
You have within you a driving, insatiable urge to own territory.
You want to own your own land, make what you will of it, and pee on the boundaries to mark your territory.
This is the main reason why people want to buy a house, even if they can’t admit it to themselves.
I have a huge backyard and a huge front yard (at least for a city like Toronto). Every single time a guy comes over to my place, the first thing they do is check out my yard. Then they comment on it:
Guy: “Whoa. You’ve got a huge yard, dude.”
Me: “Yeah, dude.”
Everyone is territorial by nature. Some vent that need by acquiring stuff. Some acquire position and status.
But every guy needs to have some physical territory to call his own. It is one of the best reasons for a man to buy his own property.
To have a home to raise your family
You need a home to raise your family.
Your place should be a stable environment that gives your kids a place to sleep, eat, play, and grow. Your place should have an aura of home, not just mere shelter.
A home is a living, breathing entity. It has a birth, a lifespan, and a death.
The longer you live in a single place, the more it develops into your home and your sanctuary.
If you want to put down roots for the long term, owning your house is a good option if you want it to eventually become a home.
To have a place to keep your stuff
If you have a family, you will accumulate a lot of stuff. If you own your property then you can bank on it as long-term storage for your stuff.
Simply going through the baby stage was a crazy time for accumulating stuff. The stages of development go by so quickly, my wife and I were pitching baby stuff into our basement while also rapidly acquiring more stuff for the stage our baby was in at that time.
By the way, I support anti-hoarding initiatives in my family. We sell our used items online and give away tons of used items to charity. Even still, I have loads of stuff constantly accumulating in my basement and garage, most of which I genuinely want to keep.
It is nice to have property where I can keep my stuff.
To have a place that no one can boot you out of
My neighbor from across the road just got booted out of his rental house. The reason is that his landlord wants to raze the place and build a Monster McMansion.
My next-door neighbor needs to vacate as well in the next couple of months. His landlord wants to live there again. So, the tenants (a family of five) needs to find new digs.
If you own, then that provides a measure of security for you and your family. As long as you can pay the bills, then your home is a place that no one can boot you out of.
I realize that there are other issues specific to ownership that do decrease security: a huge mortgage is a reduction in financial security. That being said, as long as you have steady employment and have accounted for fluctuations in interest rates, you should be fine.
Essentially, I prefer to be in a situation where if I get kicked out of my house, it’s my own damn fault because I couldn’t pay the bills. I really would rather not be in a situation where I live under a Sword of Damocles where the thread could be cut by some capricious landlord.
Granted, there certainly are many rentals that are truly long-term, with landlords dedicating living space to rentals, with no intention of selling for the purposes of development anytime in the far flung future. A lot of apartment buildings are like that. But if you want to live in a house long-term then owning is more secure than renting.
Part of true wealth is knowing you can’t get booted out of your house by some dastardly landlord; rather, if you lose your house, it’s your own damn fault for not paying the mortgage.
To have freedom to do whatever you want with your property
I often joke around that the main reason I bought my house is to have the freedom to bulldoze it and build a series of mud huts in its place. I can bring in an uncontacted tribe from the Amazon or wherever to live on my property. I can secede from Canada! My uncontacted tribe will be my national army!
Ok, I don’t really want that. But it really is nice to have the ability to do whatever you want with your property.
The best type of home to buy for maximum flexibility is a detached house. There is usually a higher cost associated with a detached house because of the near-total freedom of being able to renovate or even rebuild the home.
The second best option is a semi-detached or attached house. While you cannot demolish and rebuild without cooperation with your attached neighbors, you still have reasonable flexibility when it comes to renovation.
Condominiums have the least flexibility. You can renovate the interior to your taste, but the building management has the ultimate say in how everything outside of your apartment will look like. Also, condo owners are at the mercy of the building management: if managed poorly, you can be on the hook for many additional costs due to the incompetence of the people looking after your tower.
Now, attempting to address the screaming fits that pro-rental people are currently having…
Can you fulfill these reasons while renting your property? Well, sort of, but only partially:
To obey your innate, territorial nature: Not exactly possible with a rental. Renting your territory means someone else owns it, and there is really no getting around that.
To have a place to raise your family: Of course you can raise your family in a rental, and there is nothing wrong with that—except that you might be kicked out by a capricious landlord at any time. I have known several families in the past couple of years that were put into situations where they were forced to move.
To have a place to keep your stuff: It is annoying to move all the time. Renting can mean frequent moves. But it also keeps your stuff accumulation to a minimum, which is a good thing.
To have a place that no one can boot you out of: See above two points.
To have freedom to do whatever you want with your property: Simply not possible with a rental. Of course, there are many people in the world where this is not that important to them. I am just stating that this is something to consider if you are one of those people where this is an important consideration.
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Of course buying a house is a financial decision. Of course having a mortgage is a burden that does in fact stymie other financial goals that you may have.
Buying a home is akin to buying a car or other consumable good or whatever the hell else you want in life. If you want a house, find the price, then if you still want it pay the damn price.
I live my own life according to that immensely complicated algorithm:
Want something ⇒ Find the price of that thing ⇒ Pay the damn price
I have outlined the reasons why I wanted to buy my house in this piece.
I checked the price (which in Toronto is insane). Then I paid the damn price (and continue to pay it as I slowly kill off my mortgage).
I also made sure as much as I could that owning my house would not financially ruin me. It turns out that it appreciated greatly in value in the time that I have owned it. My only concern is that my financial head stays well above water, where my house is worth more than I owe on it.
Can you be happy in a rental home? Sure. Do some of my arguments fall apart for specific situations? Yeah, they do.
In this article I presented my own reasons for buying my house. Sure, these may not be the same for everyone, but I hope some of my motivations and experiences ring true for some of you out there.
So, rent vs buy? The decision is ultimately up to you.
Owning real estate is absolutely not for everyone. There are absolutely financial concerns that you need to consider before purchasing a home. But what I hope to achieve by this article is to really flesh out those “intangible reasons” for buying a home.
Personally I think that those benefits are far from intangible. I had concrete, solid reasons for purchasing my house, and they ring true for me every single day.
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** Check out Part 1 of this series, outlining why all the financial gurus are totally wrong about the reasons to buy a house.**